Different Watch Lists For Different Circumstances

With the market uptrend under pressure, investors should develop two different kinds of watch lists.

The first might be called a quick list — stocks in a buy zone or near a buy point. If the next market move is to a resumed uptrend, this list can become useful.

The second watch list is more of a wish list — fundamentally strong stocks that are nowhere near a buy point. But if the next market move is to correction, a normal consolidation period could define a new entry.

The Spotlight screen offers some possibilities for each list in the stock market today. Let's start with the wish list.

Facebook (FB) has a 99 Composite Rating. (The Composite Rating combines all five IBD ratings into a single number.) A 99 rating is the best possible — the top 1%. Facebook's Relative Strength line continues to hold near highs. A new base would be second stage — still a good time to buy.

Recently released data show that fund participation rose in Q3. The number of funds holding Facebook shares jumped from 1,280 to 1,380. The overall stake jumped 17%.

This incidentally is a good time to check fund action. The Q3 figures are rolling in and are still relatively fresh.

Infoblox (BLOX) also has work to do. Should it form a new base, the pattern would be stage two. In Q3, funds with a position rose from 274 to 304. The overall stake grew 4%.

Tangoe (TNGO) also isn't near a buy point. A new base would be stage two. In Q3, fund participation edged up from 208 to 219 funds. The overall stake inched up less than 2%.

LinkedIn (LNKD) might form a flat base, but the pattern would be third stage — a riskier area for an entry.

Other Spotlight stocks are actionable or close to it.

Rosetta Resources (ROSE) moved in and out of extended territory Friday. A stock shouldn't be bought 5% past the 54.71 ideal buy point. Funds held steady in Q3.

NIC Inc. (EGOV) is working on a base, but the pattern is third stage. Funds dropped from 247 to 240 in Q3. The overall ownership stake was virtually flat.

With the market uptrend under pressure, investors should develop two different kinds of watch lists.

The first might be called a quick list — stocks in a buy zone or near a buy point. If the next market move is to a resumed uptrend, this list can become useful.

The second watch list is more of a wish list — fundamentally strong stocks that are nowhere near a buy point. But if the next market move is to correction, a normal consolidation period could define a new entry.

The Spotlight screen offers some possibilities for each list in the stock market today. Let's start with the wish list.

Facebook (FB) has a 99 Composite Rating. (The Composite Rating combines all five IBD ratings into a single number.) A 99 rating is the best possible — the top 1%. Facebook's Relative Strength line continues to hold near highs. A new base would be second stage — still a good time to buy.

Recently released data show that fund participation rose in Q3. The number of funds holding Facebook shares jumped from 1,280 to 1,380. The overall stake jumped 17%.

This incidentally is a good time to check fund action. The Q3 figures are rolling in and are still relatively fresh.

Infoblox (BLOX) also has work to do. Should it form a new base, the pattern would be stage two. In Q3, funds with a position rose from 274 to 304. The overall stake grew 4%.

Tangoe (TNGO) also isn't near a buy point. A new base would be stage two. In Q3, fund participation edged up from 208 to 219 funds. The overall stake inched up less than 2%.

LinkedIn (LNKD) might form a flat base, but the pattern would be third stage — a riskier area for an entry.

Other Spotlight stocks are actionable or close to it.

Rosetta Resources (ROSE) moved in and out of extended territory Friday. A stock shouldn't be bought 5% past the 54.71 ideal buy point. Funds held steady in Q3.

NIC Inc. (EGOV) is working on a base, but the pattern is third stage. Funds dropped from 247 to 240 in Q3. The overall ownership stake was virtually flat.

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03/02/2015 06:45 PM ET

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